Some points from today’s Budget.

Pensions

• You can still pay up to £40,000 per annum into a personal pension and get tax relief at your marginal rate. It had been mooted this would go. Looked another way for every £10,000 of earned income you pay into a SIPP, the government will put an extra £2000 into the SIPP (i.e. pay your tax back) and for a higher rate tax payer you can reclaim the additional higher rate tax on your tax return
• Additionally you can now earn up to £240,000 before that relief is tapered down. If you earn over £300,000 the taper relief reduces to £4,000

ISAs

• The annual limit you can pay into an ISA remains £20,000 per UK adult. ISAs are still one of the best forms of saving, if not the best.
• Dividends from ISAs are tax free
• Any capital gains from ISAs are tax free
• CFM offer a flexible stocks and shares ISA. You can buy and hold any stock or fund that is listed on a major stock exchange.

Junior ISAs

• This is a good move. Junior ISA’s have always been fairly peripheral because it was hard to build up a reasonable sum and therefore make them cost effective. The Chancellor increased the amount that can be paid into a JISA to £9,000 each year. Basically the government is now incentivising parents and grandparents to save for their children’s future. This will obviously help meet University costs and getting on the housing ladder. With JISAs grandparents are allowed to gift directly into them. CFM  offer a JISA wrapper. It is completely flexible in that any stock or fund listed on a major stock exchange can be bought within it. Please contact us for more information. They are very simple to set up.

NS&I

• Although not explicitly stated it was implied in the budget that interest rates paid on money held at NS&I would fall. The chancellor said the government expects to raise £6bn less than before from deposits in NS&I. The reason must be that they are going to reduce rates for money held on deposit.

Housing

• A 2% surcharge on overseas individuals buying UK property will be implemented
• Fuel duty has been frozen

Entrepreneurs relief

• Reduced to 10% relief on £1m.

National Insurance 

• Threshold increased from £8632 to £9,500. A small pay rise of £106 per annum.

Interest rates 

For those that may have missed it, before the budget, Interest rates were cut by 0.5% to 0.25%. That will flow through to variable rate mortgages in April and should mean lower mortgage rates in the days ahead.

Other measures included a large road building fund, rate relief for small businesses, more funds for the health service, investment in broadband and measures to cover for the Corna virus.

It wasn’t a block buster but combined with the interest rate move should help cushion some of the blow of recent events, Corona and Oil related.